Concrete crisis: Why are schools struggling to pay for repairs?

Published

2 years ago

September 5, 2023

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The amount of money available for schools to repair and maintain their buildings has fallen by more than a quarter since 2010 (28%), a real terms cut of £2.2bn per year.

Since the Conservatives formed a majority government in 2015, the Department for Education’s capital budget has averaged £5.6bn per year – compared with £7.8bn per year in the last four years under Labour.

That is the money earmarked for things like construction, maintenance and repair work.

More than 100 schools and colleges have been told to shut buildings, partially or completely, because of concerns about the safety of the reinforced autoclaved aerated concrete (RAAC) used to construct them.

The Prime Minister Rishi Sunak has denied suggestions that he is to blame for cuts to schools’ repair and maintenance budgets, saying it was “completely and utterly wrong” to suggest he was to blame for failing to fully fund a programme to rebuild England’s crumbling schools.

Funding for the repair and maintenance of schools has fallen significantly since 2010, when Conservative education secretary Michael Gove scrapped Labour’s Building Schools for the Future Programme.

Since then, capital spending has remained far below levels seen under Labour, dropping to just £5bn during the pandemic before rising to £5.3bn last year.

Yet the department’s overall budget has grown significantly, from an average of £72bn per year during Labour’s last four years in office to £87bn under the Conservatives, a real terms increase of 23%.

The entirety of that increase has gone into the department’s fund for day-to-day spending, its resource budget, which has received an £18bn boost. At the same time, the capital budget has been cut by £2.2bn.

As a result, many schools in need of funding for repairs and maintenance have been raiding their resource budgets, which are used to pay salaries and energy bills, to fund capital projects.

A report released in June by the National Audit Office found that, in 2021-22, 71% of academy trusts used resource funding for capital projects, transferring a total of £518m from their day-to-day running costs – despite growing pressure on teachers’ pay and rising energy bills.

“The government’s own analysis shows that the school estate is in a very poor state of repair – that includes ceilings and concrete, but it also includes gas and electric,” says Luke Sibieta, a research fellow at the Institute for Fiscal Studies.

“Those sorts of issues can become urgent, so it’s not surprising at all to be seeing schools raiding their day-to-day budgets to spend on capital budgets – those capital expenditures may well be urgent.”

Schools’ electrical and plumbing systems are also in urgent need of repair

The report by the National Audit Office found, based on data from 2020, that schools required £8.5bn of repairs for issues “key to the building remaining usable and safe”, as well as £425m for things that “could present major issues”.

Among the most serious items were £2.5bn of repairs needed to schools’ electrical services, and £2.1bn to mechanical services such as plumbing.

Within the capital budget, the money ring-fenced specifically for maintenance and repairs has also fallen significantly in recent years.

The Department for Education spent £5bn on maintenance and repairs in the two years to March. Accounting for inflation in the construction sector, that is a drop of 20% compared with the two years to March 2017.

“It’s not surprising that we’re seeing a crisis in school repairs and school maintenance,” says Mr Sibieta.

“The government has been underinvesting in school repairs and maintenance for around 10-15 years now. The amount of spending falls short of what the government itself thinks it needs.

“As part of the spending review in 2020, the Department for Education thought we needed around £5.3bn per year just to repair and maintain the existing school estate. In the end, the Treasury allocated around £3bn per year.”

What is RAAC?

Also known as ‘bubbly’ concrete, reinforced autoclaved aerated concrete (RAAC) is a building material that was popular in the post-war period as a cheap, lightweight alternative to traditional concrete mixes. It was used in UK public buildings from the 1950s to the 1990s, mostly in roofing.

Its convenience came at a cost, however, as the material was found to be less durable than ‘traditional’ reinforced concrete and is prone to crumbling and cracking, especially after exposure to moisture.

Failures in RAAC roof panels started to become apparent in the 1980s, and a string of reports identified its weaknesses and short 30-year lifespan.

The issue reignited in 2018, when a Kent school roof containing RAAC collapsed, although no one was injured.

Then this summer, an RAAC beam previously thought to be low risk collapsed, leading the government to label all buildings containing RAAC potentially dangerous and order the closure of classrooms in hundreds of schools.

Sarah Skinner, chief executive of the Penrose Learning Trust, has been forced to close 12 classrooms at Surrey’s East Bergholt High School due to the presence of RAAC.

She has secured six temporary replacements, but hasn’t been told when they’ll be available.

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“Once we get the porta cabins, we will get children back, but they won’t have specialist resourcing,” she says.

“We think it will be months before the remedial works can be undertaken – at a huge cost. So, I am worried about getting children back in classrooms before Christmas.”

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

Politics

UK central bank still ‘disproportionately cautious’ about stablecoins

Published

2 hours ago

November 14, 2025

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UK central bank still ‘disproportionately cautious’ about stablecoins

The UK’s central bank, the Bank of England (BOE), has released a proposed regulatory regime for stablecoins. The consultation paper took into account the perspectives of the crypto industry, but some observers say it remains restrictive.

BOE released the document on Nov. 10 — some two years after it announced the initial discussion paper. The original offered a vision for crypto that many in the industry claimed would doom the UK’s digital asset space.

The BOE said that it received comments and feedback from a broad range of 46 different stakeholders, including “banks, non-bank payment service providers, payment system operators, trade associations, academia, and individuals.”

The UK’s central bank may have scrapped some more hardline requirements, but some in the industry believe that it isn’t enough. Tom Rhodes, chief legal officer at UK-based stablecoin issuer Agant, said the bank remains “disproportionately cautious and restrictive.”

*The bank also released a roadmap for further rulemaking. Source:* *Bank of England*

Bank of England still cautious on stablecoins

The new iteration presents a number of improvements on the 2023 version, Rhodes told Cointelegraph.

“The latest proposals do include some innovative features, such as direct BOE liquidity lines and the ability to repo reserves for liquidity purposes.”

He said that, as it concerns the UK market, “these proposals can be further explored and potentially expanded to create a more competitive backing asset regime, without compromising on stability.”

But despite the “welcome progress in the BOE’s sentiment towards stablecoins,” it has been “unusually vocal about the perceived risks of stablecoins,” said Rhodes.

One of the more controversial restrictions in the paper was limits on what the BOE called a “systemic retail stablecoin.” In the paper, this is defined as a stablecoin that is “widely used by individuals to make everyday payments such as for shopping and receiving salaries.”

The central bank wants to see limits of 20,000 pounds for individuals and 10 million pounds for businesses that accept it as a form of payment. This is an increase from the initial proposal, but the idea of limits on how much crypto you can hold didn’t sit well with some.

Crypto influencer Aleksandra Huk wrote, “Bank of England wants to cap stablecoin holdings at £20,000. Who gave them the right to tell us what to buy, where to store our money and how much we can have? […] Honestly, this is the best advert ever for privacy coins and for leaving the UK.”

There are a few caveats to the suggested rule. Geoff Richards, head of community at the Ontology Network, noted, “The proposal applies only to sterling-denominated stablecoins used in UK payment systems that could become ‘systemic.’ Not USDT, not USDC, not random DeFi tokens.”

Ian Taylor, board member of crypto industry advocacy group CryptoUK, told Cointelegraph that he understands the central bank’s more cautious approach, at least as it applies to the stablecoin limits:

“The Bank of England has a mandate to protect against financial stability. And that financial stability is connected to the banking system. So insofar as banks take deposits and they issue loans against those deposits […] creates credit, this is an economic benefit to any economy that we have.”

The BOE is rightfully worried that taking deposits out of banks would reduce their ability to lend, affecting financial stability. “So, that’s why they want to baby-step this.”

Rhodes said that the “vast majority” of UK stablecoins will not fall under the regime anyway, at least not as stated in the paper. He noted that Mastercard was only recognized as a systemically important payment system in 2021 and that non-systemic stablecoins will be regulated under the Financial Conduct Authority’s (FCA) ruleset, “which is less restrictive.”

Still work to be done as UK opens up to crypto

Access to central bank liquidity and deposit accounts at the BOE was a welcome update for stablecoin issuers. But crypto industry representatives believe that there is still room for improvement in the central bank’s plan.

Regarding the stablecoin caps, “The systemic thresholds remain uncertain,” said Rhodes. He said it would be helpful to have clarification from His Majesty’s Treasury when an issuer has reached sufficient scale to “pose a risk to the UK economy as a whole, before they will recognize the issuer as systemic.”

Taylor also noted the difficulty of enforcing these stablecoin caps. If the government is licensing an issuer, then they’re the ones “responsible for monitoring each individual client or customer, whether wholesale, corporate or retail, as to how many stablecoins they’ve given them.”

The problem is that many people get their stablecoins on secondary markets or a “host of different sources.” People can receive stablecoins as compensation at work or on an exchange or peer-to-peer transaction. “So, the actual operational enforcement of that I question, and we’ve seen no detail in regards to that.”

Overall, “clarity and speed” will make the UK stablecoin ecosystem more competitive, said Arvin Abraham, partner at Goodwin Procter. He told Cointelegraph that regulators need to give issuers “a clean runway and predictable timelines” to navigate the approvals process.

Speed isn’t the government’s strong suit, however.

The British government has been working on crypto regulations since 2017, when it first adopted Anti-Money Laundering and Know Your Customer requirements for crypto-related businesses like exchanges. Now, eight years later, the central bank is still developing its policies based on industry feedback.

The slow pace of progress presents a problem. According to Taylor, “We’ve been consulting on a wider framework to regulate stablecoins for almost five years, and we still haven’t gotten any actual license framework in place, which is problematic for a number of reasons,” he said.

“It doesn’t help businesses that want to launch stablecoins in the UK. They don’t have a clear roadmap of how to do that,” he said, “which in turn forces them to move offshore to jurisdictions where there are other regulatory frameworks already live.”

This is for a number of reasons, Taylor explained, including consecutive changes in government, as well as a lack of “real champions in any of our key stakeholders, be that the current government, be that Treasury, be that the FCA.”

Progress on crypto regulations may be slow in the UK — slower than many in the industry would like — but for Abraham, “The Bank is being pragmatic and fair. The overriding message is that innovation is welcome, but if you want your token to function like money, you need money-grade controls.”

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